RBS trial delayed until June to allow bank and shareholders time for talks

Mr Justice Hildyard at London's High Court is told both sides are "hopeful" of a deal.

Disgraced former RBS boss Fred Goodwin is unlikely to answer questions in court over the events leading up to the bank's near-collapse in 2008 (Photo: Reuters)Reuters

RBS shareholders, who claim they were misled by the bank ahead of its taxpayer bailout, have had their court case adjourned until next month with both parties "hopeful" of a deal.

This is the third adjournment Mr Justice Hildyard at London's High Court has allowed – after the case was dramatically halted on Monday (22 May) as the 14-week hearing was set to begin. This came just hours after RBS had almost doubled its offer to settle the dispute.

The adjournments come as disgraced former RBS boss Fred Goodwin and a raft of former executives are set to appear as part of a £700m ($908m) lawsuit brought against the lender by 9,000 retail investors and 18 institutions in The RBS Shareholder Action Group.

The former chief executive Goodwin – who was stripped of his knighthood following the bank's near collapse – was poised to answer questions over the events leading up to the government's £45.5bn bailout in 2008.

RBS shareholders allege that the bank's management duped them into taking part in a calamitous £12bn fundraising in April 2008, just months before the government saved the bank and wiped 90% off the value of its shares.

The state-backed bank is offering shareholders 82p a share, almost double the 43.2p share it had previously tabled, following talks over the weekend. This settlement is likely to be worth £200m.

The court heard the majority of investors have already indicated they were "willing to accept the latest offer" from the bank to settle the case.

Jonathan Nash QC, acting for the shareholders, told the court a hold up in reaching agreement was "the logistical problem" of contacting some of the thousands of retail investors to allow them time to consider the offer.

He added there were a "small number of shareholders whose current address does not appear to be correct".

Mr Justice Hildyard adjourned the start of the trial until June 7 but ordered the two sides to return to the High Court on Thursday afternoon (25 May) for a progress update on settlement talks.

Claims against RBS

The bank's current chief executive Ross McEwan was personally involved in the settlement talks to avert a high-profile trial that would undoubtedly further damage the bank's reputation.

Last month current RBS' McEwan agreed to pay three shareholder groups £800m to settle the claims, but thousands of other claimants have held out for a court battle.

Chancellor Philip Hammond said, in April, that the government was prepared to sell its stake in the bank at a loss. The bank is currently 72% owned by the taxpayer.

RBS reported a £7bn annual loss for 2016 in February, its ninth year of losses in a row.

The bank is also yet to settle with the US Department of Justice over claims it mis-sold toxic residential mortgage-backed securities.